Foreign Relations of the United States Diplomatic Papers, 1932, The Far East, Volume III

793.94/5061: Telegram

The Consul General at Shanghai (Cunningham) to the Acting Secretary of State

Shanghai, April 19, 1932—10 a.m.
[Received April 19—7:35 a.m.]

214. The resumption of normal business is proceeding very slowly in Chapei and other territory formerly Chinese controlled but now either actually or constructively under Japanese military occupation. Aside from actual destruction American business in such territory with the business of other nationals has suffered in various ways as illustrated by the following instances, each instance being typical of other similar cases.

(1) Robert Dollar Company has several hundred thousand taels worth of lumber on consignment at Chinese lumber yards in Chapei. The Japanese military are putting all manner of difficulties in the way of the sale of this lumber by the yards and its removal for places of ordinary commercial consumption. Both oral and written representations by this office to the Japanese Consulate General on behalf of the Dollar Company’s interest in lumber have so far failed. Other American concerns are experiencing similar difficulties in moving stocks of goods and machinery from Chapei. A Chinese unofficial organization was set up there about April 1st with the consent of Japanese military. This organization levied a contribution on all goods moved. It was nominally closed by Japanese on April 11th but it is expected that similar organizations will take its place.

(2) Andersen, Meyer [& Co.] have received orders from Wingon Textile Company, a Chinese firm, for repairs to plant and machinery in their cotton mill at Woosung which was damaged by shell fire to extent of about 3 million taels. Andersen, Meyer have also been appointed managers of the mill but I am not inclined to give official support to their requests made purely in this capacity. However, their orders for machinery are undoubtedly bona fide and I am told will mean the placing of orders for considerable amounts of American machinery. Japanese troops formerly billeted at Japanese cotton mill nearby moved to Wingon Cotton Mill March 8th and remain in occupation. Andersen, Meyer state it will be impossible to commence repairs until they evacuate and Andersen, Meyer as managers ask me to demand this evacuation. I have written informally to Japanese Consul General laying the case before him and expressing hope that the American firm may be permitted to repair the plant and machinery without hindrance. This is as far as I believe I can go at present.

(3) No Chinese police are permitted by Japanese to function in Chapei or surrounding Chinese territory and Japanese military authorities appear to be making no systematic effort to police that area or in fact any area behind their front lines. The result is that Chinese bad characters have almost unchecked freedom of action in Chapei. There are several American-owned factories located in Chinese territory near the Settlement boundary and in at least one case their employees have been intimidated and held up. This factory owner has appealed to me to try to obtain International Settlement police protection extended to his plant and surrounding roads. I have advised him to hire his own watchmen but this will not solve the problem of the hold-up of employees outside his plant. He did not wish to ask for Japanese military protection except as a last resort fearing a strike by his Chinese employees if he should do so. In my opinion since Japanese are in actual control of this area this Consulate General must look to them for police protection for American property while at the same time making representations to the Chinese municipal authorities although the latter have at present no actual lands.

2. With reference to the Department’s telegram 61, February 29, 5 p.m., I request that in making representations to Japanese authorities both regarding American losses and the protection of American property a clause regarding claims similar to that suggested in my telegram 100, February 23, 3 p.m., be inserted.

3. I desire that this Consulate General should extend all legitimate assistance to American business and in connection therewith request instructions regarding what degree of recognition should properly be given to Japan’s de facto authority in certain sections here. Despatch is going forward⁷¹ giving more details regarding cases.

Repeated to the Legation, copy to Minister.

Cunningham

71. Not printed.